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CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 1325 OF 2022
Jindal Poly Films Ltd.
A Limited Company duly incorporated and registered under the Companies Act 1956 having office at B-102, Poonam
Chambers, Worli, Mumbai ..Petitioner
Floor, Belapur Bhawan, CBD, Navi Mumbai 400 614.
…Respondent
Mr. Amrut Joshi, i/b Mr. Tejas S. Mahamuni, for the Petitioner.
Mr. Sandip D. Ghaterao, for the Respondent.
JUDGMENT
1. Rule.
2. Rule made returnable forthwith and, with the consent of the counsel for the parties, heard finally.
3. The Petitioner takes exception to an order dated 27th April 2021 passed by the learned Civil Judge, Senior Division, Thane, on an Application for production of additional evidence, in Municipal Appeal No. 16 of 2004 (Exhibit “48”), whereby the said Application preferred by the Petitioner came to be rejected holding, inter alia, that the Petitioner- Appellant failed to satisfy the conditions prescribed in Rule 27 of Order 41 of the Code of Civil Procedure 1908 (“the Code”) for grant of permission to lead additional evidence.
4. Shorn of unnecessary details, the background facts leading to this Petition can be stated as under:
5. The Petitioner was engaged in import of various types of goods which were stored in its godown at Navi Mumbai, before sale. The Petitioner had imported goods into the area of Navi Mumbai Municipal Corporation, the Respondent, for use, consumption or sale therein. Under the provisions of Section 127 (2)(aa) of the Maharashtra Municipal Corporations Act 1949 (“the Act of 1949”), as it then stood, the Respondent was authorized to levy cess on those goods. The Petitioner was assessed under the Bombay Provincial Municipal Corporation (Cess on Entry of Goods) Rules 1996 (“the Rules of 1996”). The Petitioner had filed returns claiming refund of the cess paid by it under Rule 49 of the Rules 1996, claiming that the goods were exported outside the city.
6. Under Rule 25(3) of the Rules 1996, assessment proceedings were initiated. Eventually, by an Assessment Order dated 17th April 2004, the Deputy Municipal Commissioner (Cess), disallowed the refund claimed by the Petitioner holding, inter alia, that the sale and delivery of goods was completed within the limits of Navi Mumbai and the goods were not exported, as claimed. The Petitioner was held liable to pay total dues of Rs.18,64,533/-.
7. Being aggrieved, the Petitioner preferred an Appeal under the provisions of Section 406 of the Act of 1949, being Municipal Appeal NO. 16 of 2004, before the learned Civil judge, Thane. It may not be necessary to elaborately note that the proceedings which ensued in the said Appeal. Suffice to note that the Respondent filed a Written Statement, issues were settled and, by an order dated 13th January 2020,an Application preferred by the Petitioner to amend the Appeal memo came to be allowed.
8. Thereafter, the Petitioner preferred an Application seeking permission to produce additional evidence (Exhibit “48”) asserting that the Petitioner had transferred the goods from the godown at Navi Mumbai to various other branch offices of the Petitioner and the said fact was evidenced by the check-post receipts, account books, gate passdelivery challans as well as sales register etc. However, the concerned Deputy Municipal Commissioner (Cess) did not take on record and consider those documents. It was, therefore, necessary to allow the Petitioner to produce additional evidence before the learned Judge.
9. The Application was resisted on behalf of the Respondent by filing a Reply contending, inter alia, that the proceeding before the learned Judge was an Appeal under Section 406 of the Act of 1949 and not the original proceeding. Therefore, the Petitioner was not entitled to lead additional evidence as a matter of right. On facts as well, the Respondent countered the claim of the Petitioner. It was contended that the documents, then produced by the Petitioner, were duly considered by the Assessing Officer.
10. By the impugned order, the learned Judge was persuaded to reject the Application observing that the proceeding before the learned Judge under Section 406 of the Act of 1949 was required to be treated as an Appeal and, thus, the Petitioner-Appellant was required to satisfy the conditions prescribed under Order 41 Rule 27 of the Code.
11. Being aggrieved the Petitioner has invoked the writ jurisdiction.
12. I have heard Mr. Amrut Joshi, the learned Counsel for the Petitioner, and Mr. Sandeep Ghaterao, the learned Counsel for the Respondent, at some length. With the assistance of the learned Counsel for the parties, I have perused the material on record.
13. Mr. Joshi, the learned Counsel for the Petitioner, would urge that the learned Civil Judge was clearly in error in holding that the proceeding under Section 406 of the Act of 1949 was an appellate proceeding, despite thitherto following the procedure prescribed for a suit by allowing the Respondent to file Written Statement, framing the issues, accepting the Affidavit in lieu of examination-in-chief and even permitting the Petitioner to amend the Appeal memo.
14. Mr. Joshi strenuously submitted that the learned Civil Judge misdirected himself in placing reliance on the judgment in the case of Walchandnagar Industries Ltd, Mumbai Vs Municipal Corporation of the City of Pune & Ors,[1] which was rendered in a completely different context. Amplifying the submission, Mr Joshi would urge that a variety of orders are appellable under Section 406 of the Act 1949. In the case of Walchandnagar Industries Ltd, Mumbai (Supra), the challenge was to clause (e) of Section 406 of the Act of 1949 which warrants a predeposit before the Appeal is entertained. In that context, the Division Bench has held that the proceeding under Section 406 of the Act of 1949 cannot be styled or compared to “initial or original proceeding”. The challenge in the instant case arose out of the dis-allowance of a claim for refund of the cess collected under Section 127(2)(aa), as it then stood, and, thus, the ratio of the decision in the case of Walchandnagar Industries Ltd, Mumbai, could not have been readily imported.
15. Mr. Joshi would urge that, it is trite that the a decision is only an authority for what it actually decides and not what logically flows from the said decision. To this end, reliance was placed on the judgment 1 2014 (2) Mh.L.J. 852. of the Supreme Court in the cases of Union of India and Others Vs Dhanwanti Devi and Others[2] and Oriental Engineering Company Ltd Vs Smt Raj Kumari and Others.[3]
16. Mr Joshi would submit that the provisions contained in Order 41 Rule 27 of the Code had no application to the Application in question. Laying emphasis on the fact that, the learned Civil Judge has allowed a Plaint to be filed by the Petitioner, accepted the Written Statement thereto on behalf of the Respondent, framed issues as per Order 14 of the Code, allowed the amendment to be carried out in the Plaint and even permitted the Affidavit in lieu of examination-in-chief to be filed on behalf of the Petitioner, Mr. Joshi urged that, when the Petitioner intended to produce the relevant documents on record by way of additional evidence, the learned Civil Judge unjustifiably applied the provisions contained in Order 41 Rule 27 of the Code. Even the determination on the said count, according to Mr. Joshi, is infirm.
17. In any event, Mr. Joshi would urge, the Appeal is a continuation of the suit or/original proceeding. The powers of the Appellate Court are co-extensive with that of the Trial court. Thus, there was no prohibition for the learned Civil Judge to take the documents on record. A strong reliance was placed by Mr. Joshi on a judgment of learned Single Judge of this Court in the case of Shri Brijlal Biyani Vidya Niketan Shikshan
Prasarak Mandal & Anr Vs. Bharti W/o Khanderao Dabhade & Anr.[4] Mr. Joshi further submitted that production of the additional evidence would assist the Court in arriving at a just decision of the case and the Respondent-Corporation would not suffer any prejudice whatsoever if the additional documents are permitted to be tendered in evidence.
18. Per contra, Mr. Ghaterao, the learned Counsel for the Respondent, would submit that the controversy sought to be raised by the Petitioner is no-longer res integra. The Division Bench Judgment of this Court in the case of Walchandnagar Industries Ltd, Mumbai (Supra) rules in clear and explicit terms that the proceeding under Section 406 of the Act of 1949 cannot be styled or compared to “initial or original proceeding”. Secondly, in view of the provisions contained in Section 434 of the Act of 1949, the provisions of the Code relating to Appeals from original decrees apply to Appeals to the Judge from the orders of the Commissioner. Thus, the learned Civil Judge was well within his rights in holding that the proceeding under Section 46 of the Act of 1949 was an Appellate proceeding and it was incumbent upon the Petitioner to satisfy the conditions prescribed under Rule 27 of Order 41.
19. To buttress these submissions, apart from the decision in the case of Walchandnagar Industries Ltd, Mumbai (Supra), Mr. Ghaterao placed reliance on the judgment of this Court in the cases of Wandleside National Conductors Ltd Vs Municipal Corporation For The City of Pune
& Others,[5] and Titan Industries Ltd, Mumbai Vs Thane Municipal Corporation and Ors[6] and a judgment of the Gujarat High Court in the case of Jamnagar Municipal Corporation Vs Mrudala Mahendra Parmar.[7]
20. Mr. Ghaterao further submitted that, even otherwise, the Petitioner does not deserve the permission to adduce additional evidence. In fact, the Petitioner had preferred such an Application seeking permission to adduce additional evidence in the year 2013 and the said Application was rejected on 13th August 2013. Thus on the same set of facts, the Petitioner could not have filed another application seeking identical relief.
21. Lastly, Mr. Ghaterao would urge that, by no stretch of imagination, the essential conditions for grant of the permission to lead additional evidence at appellate stage can be said to have been fulfilled. For this purpose, Mr. Ghaterao placed reliance on the judgment of the Supreme Court in the case of Union of India Vs Ibrahim Uddin & Anr[8] and a judgment of learned Single Judge of this Court in the case of Sandipan Namdeo Garje Vs Surendra Waman Kathavte[9].
22. I have given anxious consideration to the submissions canvassed across the bar. The core controversy lies in a narrow compass. What is 5 1989 Mh.L.J. 755 6 2011 (6) Mh.L.J. 228.
2019. the nature of the proceeding under Section 406 of the Act of 1949 before the learned Judge? To explore an answer, it may be necessary to note few provisions of the Act 1949.
23. Under Clause 29 of Section 2 of the Act of 1949 the “Judge” means, in the city of Pune, the Judge of the Court of the small cause, and, in any other city, the Civil Judge (Senior Division) having jurisdiction in the city. Chapter XXVI of the Act of 1949 contains a fasciculous provisions under the heading, “Proceedings Before Judge, District Judge and Magistrate”. Part-III of Chapter XXVI, provides for Appeals against the Valuations and Taxes. The relevant part of Section 406 reads as under:
24. It would be contextually relevant to note that under Section 127 (2)(aa), which came to be deleted by the Act of 42 of 2017, the Corporation was empowered to impose a cess on entry of goods into the limits of the City for consumption, use or sale therein to be levied in lieu of Octroi with the previous sanction of the State Government.
25. Section 152A of the Act of 1949, which was also deleted by the Act of 42 of 2017, contained provisions relating to levy of cess.
26. At this stage, it must be noted that there is no dispute over the fact that the cess was then levied in accordance with the provisions of the Act of 1949. In fact, the assessment proceedings were commenced after the Petitioner claimed refund under Rule 49 of the Rules 1996. The controversy between the parties revolves around the question as to whether the Petitioner had exported the goods and was thus entitled to claim refund.
27. Evidently, Section 406 provides for an Appeal against the levy of tax charged under the Act of 1949. The thrust of the submission of Mr. Joshi was that though expression “Appeal” has been used in Section 406 of the Act of 1949, yet, the proceeding before the Judge has the trappings of a suit-original proceeding. An endeavour was made by Mr. Joshi to draw home the point that reckoning the said nature of the proceeding under Section 406 of the Act of 1949, the learned Judge had followed the procedure which is compatible with the trial of the suit. The learned Civil Judge was thus not justified in importing the principle contained in Order 41 Rule 27 of the Code while deciding the Application seeking permission to seek additional evidence by misconstruing the ratio of the judgment in the case of Walchandnagar Industries Ltd, Mumbai (Supra).
28. At this juncture, it may be apposite to note the controversy that was resolved in Walchandnagar Industries Ltd, Mumbai (Supra). In the said case, the Constitutional validity of Section 406 (2)(e) of the Act of 1949 warranting pre-deposit of the amount of rateable value or capital value or disputed tax, was challenged. One of the submissions canvassed on behalf of the Petitioner was that the styling of the provision under Section 406 of the Act of 1949 as an “Appeal” was a misnomer since the original proceeding was in fact before a judicial authority. Thus the imposition of any pre-condition of deposit of the entire disputed tax claimed for entertainment of the said proceeding was ex-facie arbitrary, unreasonable, unconstitutional and null and void.
29. The Division Bench of this Court adverted to the provisions contained in Section 406 of the Act of 1949 and the Taxation Rules and came to the conclusion that the proceeding under Section 406 of the Act of 1949 cannot be styled or compared to initial or original proceeding. The Division Bench sought support to its conclusion from the observations of the Supreme Court in the case of Gujarat Agro Industries Co. Ltd Vs Municipal Corporation of the City of Ahmedabad and Ors.10 In the said case, the Supreme Court had observed in paragraph 11 as under: “We also note that under clause (c) of subsection (2) of Section 406, a complaint lies to the Municipal Commissioner against imposition of any property tax and only after that when the complaint is disposed of that appeal can be filed. Appeal to the court as provided in clause (e) may appear to be rather a second appeal.”
30. A painstaking effort was made by Mr. Joshi to draw home the point that the aforesaid Division Bench judgment was in the context of the challenge to the validity of Clause (e) Section 406 (2) of the Act of
1989. It does not govern all Appeals before the learned Judge which can be filed under the provisions of Section 406 of the Act of 1949. An Appeal against dis-allowance of the refund under Rule 49 and assessment of cess under Rule 25 of the Rules 1996 stands on a completely different footing, urged Mr. Joshi.
31. I find it difficult to agree with the aforesaid submission of Mr. Joshi. The observations of the Supreme Court in the case of Gujarat Agro
Industries Co. Ltd (Supra), extracted above, indicate the true import of the proceeding under Section 406 of the Act of 1949 before the learned Judge. The Legislature has consciously provided remedy of Appeal in certain cases while allowing filing of original proceedings as well before the learned Judge. For instance, under Section 417 of the Act of 1949, the owner of a building or land may apply to the Judge when he is prevented by the occupier of the land from complying with any provision of the said Act. Whereas, apart from Section 406, under Section 414 also, the Appeals lie to the Judge against the orders of the Commissioner in the specified cases.
32. Moreover, under Part X of Chapter XXVI of the Act of 1949, ‘Miscellaneous’ provisions have been made in relation to the proceeding before the Judge, District Judge and Magistrate. Section 434 expressly makes the provisions of the Code applicable to the proceeding before the Judge. It reads as under:
33. In view of the clear and explicit provision that the provisions of the Code relating to Appeals from the original decree shall apply to Appeals to the Judge from the orders of the Commissioner, and relating to Appeals from appellate decrees shall apply to the appeals to the District Court, the submission of Mr. Joshi that the procedure which is applicable to the original proceeding before the Trial Court is required to be followed while hearing the Appeal by the Judge, under Section 406 of the Act of 1949, simply does not merit countenance. The only outlet provided by sub-section (1) of Section 434 is the saving clause, “save as expressly provided by this Chapter”, with which sub-section (1) of Section 434 begins.
34. Indeed there are provisions which are not compatible with the provisions relating to the Appeals from the original decrees. Section 408 of the Act of 1949, provides for reference of the dispute to arbitration, in a pending Appeal, with the consent of the parties, and, thereupon, the Application for reference shall be treated to have been made in a suit and the Judge would be treated to be a “Court” within the meaning of the Arbitration and Conciliation Act 1996. Under Section 418 of the Act of 1949, for the purpose of any enquiry or the proceeding under the said Act, the Judge may summon and enforce the attendance of witnesses and compel them to give evidence and compel the production of the documents and in all matters relating to such enquiry or proceeding, the Judge shall be guided generally by the provisions of the said Act, as far as the same are applicable.
35. Save and except the aforesaid departure and the other provisions contained in Chapter XXVI, in an Appeal under Section 406, the Judge is required to follow the procedure relating to the Appeals against the original decrees. From this standpoint as well, the endeavour of Mr. Joshi to carve out a distinction in the matter of the Application of the Division Bench judgment in the case of Walchandnagar Industries Ltd, Mumbai (Supra), does not merit acceptance.
36. It is true, if the provisions contained in Section 418 of the Act of 1949 are liberally construed, and in the light of the nature and tenor of the Appeal under Section 406 before the learned Judge, the provisions contained in Order 41 Rule 27 of the Code may not be applicable with the strict rigor as they apply in case of an Appeal against a decree passed by a civil court. Yet, the facts of the case at hand appear to be quite gross. The impugned order was passed by the Assessing Officer on 17th April 2004. The Appeal came to be filed in the year 2004. On the own showing of the Petitioner, the Petitioner had initially filed an application for adducing the evidence (Exhibit “29”) and the said application was rejected by an order dated 13th August 2013. Thereafter, the Petitioner filed an application to remit the matter back to the Deputy Municipal Commissioner (Cess) for hearing after providing an opportunity to adduce evidence. The said Application was sub-judice. After the amendment in the Appeal memo, the Petitioner again filed the instant application seeking permission to lead additional evidence, though the first application was rejected by the learned Judge on 13th August 2013 itself.
37. The situation which thus obtains is that, after over 20 years of the assessment order, the Appeal has not progressed to the stage of the hearing.
38. In these circumstances, the learned Judge was fully justified in holding that a case for permission to file additional evidence at the appellate stage was not made out.
39. The fact that the learned Judge had initially permitted the Respondent to file the Written Statement, issues were settled and amendment was allowed etc, do not imply that the learned Judge ought to continue with the procedure applicable to an original proceeding.
40. Resultantly, in exercise of the supervisory jurisdiction, this Court does not find any infirmity in the impugned order.
41. Hence, the following order.: O R D E R:
(i) Petition stands dismissed.
(ii) No costs.
(iii) Rule discharged.